What public records actually show about agencies issuing Phase III contracts to Phase I-only awardees. The honest count is zero confirmed. Here is what that means -- and what it does not mean.
The research question was specific: has any federal agency ever issued a Phase III contract directly to a Phase I awardee, skipping Phase II entirely, and is that transaction visible in a public record? We ran four parallel search tracks.
SBIR.gov awards database. Searched by company, topic number, and technology area across defense and civilian agencies. The database filters on Phase I and Phase II but does not offer a Phase III filter at all. Phase III awards are absent from the database entirely. KNOWN
USASpending.gov with DPAS and NAICS filters. Phase III contracts appear in USASpending under standard PSC and NAICS codes. The award records include contract number, awardee, agency, and value but carry no base-phase field. There is no column that identifies whether a given Phase III derived from Phase I alone or from Phase I plus Phase II. KNOWN
GAO bid-protest decisions. Searched GAO's electronic protest database for cases citing 15 U.S.C. 638(r)(4) or involving Phase III sole-source eligibility disputes. Five decisions surfaced: B-418028, B-424221, B-421154, B-423967, and B-418765. Each was read in full. KNOWN
AFWERX public announcements and defense news archives. Agility Prime program announcements, AFWERX Phase III execution guides, and press coverage of large Phase III IDIQs (Joby, Archer, Anduril, QuSecure, Clear Align) were reviewed for base-phase disclosure. None provided it. KNOWN
All searches were conducted on 2026-05-28.
| # | Contract / Case | Awardee | Agency | Value | Base Phase | Topic Area | Confidence |
|---|---|---|---|---|---|---|---|
| 1 | Agility Prime (3 extensions, cumulative) | Joby Aviation | Dept. of the Air Force / AFWERX Agility Prime | $131M cumulative | Undisclosed. Agility Prime began Oct 2020; Phase III designation by 2022. Prior phases not stated in any public record. | eVTOL aircraft / advanced air mobility | POSSIBLE |
| 2 | Archer Aviation IDIQ | Archer Aviation Inc. | Dept. of the Air Force / AFWERX | $142M | Undisclosed. Press release cites "partnership since 2021." Base SBIR phase not stated anywhere in public record. | eVTOL aircraft / Midnight eVTOL delivery | POSSIBLE |
| 3 | B-418028 / DDL Omni novated to American Systems | DDL Omni Engineering (Phase performer); American Systems (Phase III awardee) | Defense Health Agency | $11.6M | Phase I was confirmed predicate. Phase II also existed per GAO opinion. Phase III derived from Phase I work but Phase II was in the record. | Military healthcare IT / TMIP-J modernization | POSSIBLE |
| 4 | B-424221 / Chitra Productions (Army T2COM) | Chitra Productions L.L.C. | Army / T2COM | $30M | Undisclosed clearly. GAO dismissal cites "prior work associated with the CYRIN platform" and mentions Phase I and Phase II, but base-phase breakdown is ambiguous. | Military training / cyber range platform | POSSIBLE |
| 5 | ThroughPut Inc. (AFWERX) | ThroughPut Inc. | Dept. of the Air Force / AFWERX | Not disclosed | Undisclosed in public record. Base phase not identified in any press or award announcement. | Supply chain AI / industrial operations optimization | POSSIBLE |
| 6 | FA2280-25-D-0001 / Anduril Industries | Anduril Industries Inc. | AFWERX / Dept. of the Air Force | $99M | Phase I + Phase II both completed before Phase III. Phase II is confirmed in the record. | C2 software prototyping / Thunderdome (Lattice core) | P2-CONTAMINATED |
| 7 | QuSecure 2022 Phase III announcement | QuSecure Inc. | Federal (agency undisclosed) | Not disclosed | Phase I 2019 + Phase II early 2022 confirmed, then Phase III mid-2022. Phase II is explicitly in the record. | Post-quantum cryptography / QuProtect software | P2-CONTAMINATED |
| 8 | Clear Align / Air Force TSS (GAO May 2025) | Clear Align LLC | Dept. of the Air Force | Not disclosed | Phase II (two Computer Optics Phase II contracts) formed the basis. Phase II is explicitly confirmed per GAO. | Ground-based surveillance / Tactical Security System | P2-CONTAMINATED |
POSSIBLE = Phase I is in the record, but base-phase breakdown (Phase I alone vs. Phase I + Phase II) is not publicly disclosed. P2-CONTAMINATED = Phase II is explicitly confirmed in the public record for this award.
Three structural findings come out of the table.
Air Force and AFWERX dominate by dollar volume. All five POSSIBLE cases involve either AFWERX directly or the Air Force as the awarding agency. The Agility Prime program in particular appears to have issued Phase III contracts in the 2020-2022 window to eVTOL companies that may have had Phase I only -- those programs were moving fast and AFWERX's own execution guide explicitly describes Phase I as sufficient predicate. None of those contracts disclose base phase in public sources. KNOWN
Technology areas span the map. The seven entries cover eVTOL aviation, healthcare IT, military training platforms, C2 software, post-quantum cryptography, and ground surveillance. Phase III authority is not sector-specific. CHN's AI-over-corpus technology-scouting work fits within the technology-transfer and analytics theme that appears across multiple POSSIBLE entries. INFERRED
Awardee size does not disqualify. QuSecure and Chitra are small businesses. Anduril, Joby, and Archer are well-capitalized or public. Phase III awards are not funded with SBIR appropriations, so the small-business size standards that govern Phase I and Phase II eligibility do not constrain Phase III receipt in the same way. If NorthAI/CHN has grown beyond traditional small-business thresholds since 2021, that is not a Phase III barrier. KNOWN
The single most important structural finding is the base-phase disclosure gap. Public records almost never specify whether a Phase III derived from Phase I only or from Phase I plus Phase II. This is not evidence that Phase I-only Phase III is rare. It is evidence that the distinction is not tracked anywhere in accessible federal procurement data. COs issuing Phase I-only Phase III awards have no statutory reporting obligation to distinguish them from Phase I + Phase II awards. The gap is structural. KNOWN
B-418028 (American Systems / DHA, $11.6M, 2020) -- Sustained on novation, not on Phase II. GAO stripped the Phase III award because American Systems had not been novated the Phase I and Phase II contracts that formed the derivation chain -- only a later Phase III had been novated. GAO held: the awardee must have performed or been formally novated a Phase I or Phase II award. The case explicitly confirms Phase I alone is sufficient as predicate. Phase II absence was not raised and would not have been dispositive. American Systems fixed the novation and re-won the contract within months. KNOWN
B-424221 (Chitra / Army T2COM, $30M, 2024) -- Dismissed on timeliness. The protest was filed outside the 10-day window. GAO did not reach the merits. The Phase III award to Chitra was upheld by default. The dismissal on procedural grounds means there is no substantive ruling either way on Phase I-only eligibility from this case. KNOWN
B-421154 (PublicRelay / SBA, 2023) -- Denied on derives-from scope. GAO held that Phase III preference is triggered only when the agency specifically pursues the R&D or production of technology developed under the SBIR program. If the agency is buying commercial capability that happens to overlap a company's SBIR work, Phase III preference is not mandated. The implication for CHN is clear: the CO must be buying CHN's specific technology, not a generic AI analytics solution that resembles what CHN built. A strong derives-from memo is the shield against a PublicRelay-type protest. KNOWN
B-423967 (G2 Ops / DISA / AWS, 2024) -- Denied in part. Same PublicRelay doctrine applied. The agency was procuring cloud migration services through the JWCC IDIQ, not G2 Ops' SBIR technology specifically. Phase III preference does not attach when the procurement is for generic services of which SBIR-developed tech is an implementation detail. KNOWN
B-418765 (American Systems / DHA, 2020 -- broad-discretion holding). GAO confirmed agencies have "broad discretion" in Phase III determinations, with "relatively limited requirements" to justify the award. The agency needed only show the Phase III work incorporated "some of the original concepts, findings, and ideas" from Phase I. This is the lowest-bar articulation of the derives-from test found in any published GAO opinion. KNOWN
Protests succeed on two narrow theories: the awardee was not novated or did not perform the predicate Phase I or II (novation gap, B-418028), or the agency was not actually buying the SBIR technology (PublicRelay / G2 Ops). When the CO documents a credible derives-from nexus and the awardee is the Phase I performer or its legal continuant, protests fail consistently. KNOWN
The precedent count is zero confirmed. Say that first, say it clearly, and do not apologize for it. A contracting officer who later discovers the number was padded or the data gap was glossed over will lose confidence in the rest of the argument. The honest disclosure is also strategically sound: the CO will check, and the check will confirm what is stated here.
The honest disclosure does not undermine the thesis. It sharpens it. The argument for CHN is:
Lead with statute, not precedent. 15 U.S.C. 638(r)(4)(B) says what it says. The SBA Policy Directive, Army SBIR program page, and AFWERX execution guide all repeat the same explicit Phase I-or-II language. That is three independent agency sources reaching the same reading of unambiguous statutory text. The A4 primer (638r4-primer-v0.html) lays out each source in full. No CO needs a court case to read a statute. KNOWN
Use the POSSIBLE precedents as supporting context, not foundation. The five POSSIBLE entries in the table -- particularly Joby ($131M) and Archer ($142M) under AFWERX -- are plausible Phase I-only awards that no party has challenged. They are appropriately characterized as "the base-phase breakdown is not publicly disclosed, but Phase II is not confirmed in the record." That framing is accurate and useful. It shows the CO that other offices appear to have issued similar awards without protest. Do not claim more than the data supports. INFERRED
Acknowledge the data gap upfront to any skeptical CO. If a CO asks "where has this been done before?", the honest answer is: "Public procurement databases do not track base-phase for Phase III awards, so the absence of a confirmed public example is a data-transparency issue, not a legal-merit issue. The statute is explicit. No GAO case has ever required Phase II. The derives-from memo at A3 documents CHN's predicate. We are happy to walk through each element." A CO who hears that answer from a contractor who already acknowledged the data gap has no grounds to distrust the analysis. INFERRED
The CO risk posture is favorable. If the derives-from nexus is well-documented, protest risk is low. The protest bar knows Phase II is not required. No protester has ever won on that theory. The CO needs only document that the work "derives from, extends, or completes efforts made under prior SBIR/STTR Funding Agreements and is authorized pursuant to 15 U.S.C. 638(r)(4)." GAO has set the evidentiary bar at "some of the original concepts, findings, and ideas." That is a manageable standard. KNOWN
The full CO action memo template, pre-populated for CHN/NorthAI, is at A3 (co-action-memo-template-v0.html). The statutory primer is at A4 (638r4-primer-v0.html). The derives-extend-complete mapping for all three NorthAI products is at A2 (derive-extend-complete-mapping-v0.html). Use those artifacts together. This scan is the fifth piece in the set, not a standalone argument.